Technology StocksKVH Industries, Inc.

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To: Roadkill who wrote (196)6/30/1998 9:08:00 PM
From: Step1
   of 7012
Glad I have just been watching...

I guess patience will be rewarded this time more than any other time...

Seems like the numbers will really be dismal

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To: Step1 who wrote (197)7/10/1998 11:22:00 AM
From: Roy F
   of 7012
KVH Receives $1.7M in Orders, Awards ForTACNAV Systems and New Development
July 10, 1998 11:07 AM

MIDDLETOWN, R.I.--(BUSINESS WIRE)--July 10, 1998--The U.S. Army has ordered about $772,000 in additional TACNAV(tm) systems from KVH Industries, Inc. KVHI , bringing total purchases under an existing contract to nearly $11 million. This latest option exercise represents the first use of the KVH tactical navigation system by the U.S. Army National Guard, a move that is notable because it extends TACNAV employment beyond initial Army application parameters for the first time. The company expects to begin shipping in the 1998 third quarter.

"We are gratified by the continuing demand for our TACNAV systems in such a large market as the U.S. military," said Martin Kits van Heyningen, president and CEO. "The combination of our system's success in the field and its reasonable cost is eliciting a growing consensus within the Army and among congressional representatives that TACNAV offers a navigation solution for a broad range of military needs. We believe the result of this positive response may be a ten-fold increase in TACNAV sales to the U.S. military."

With the aid of $916,000 in Small Business Innovation Research (SBIR) grants that have been awarded to KVH, the company also is developing fiber-optic components with demonstrated capabilities for enhancing TACNAV performance. A next-generation fiber-optic upgrade to TACNAV, ToFOG(tm) Navigator, is advancing through development under a Phase II SBIR grant for $747,000, including options. ToFOG Navigator will offer the benefit of a quantum leap in pointing and targeting accuracy from the basic TACNAV system. In addition, ToFOG Navigator will solve the problem of Global Positioning System (GPS) jamming, which the military has identified as an existing and growing problem with potentially serious consequences for U.S. forces.

A $70,000 Phase I grant from the Navy has just been awarded to KVH to develop a Global Positioning fiber optic gyroscope sensor system that consistently delivers reliable, highly accurate navigation and targeting capabilities in mobile environments. The company's three-axis, non-magnetic system is an integration of GPS, FOGs and accelerometer sensors. The KVH system will increase bandwidth, improve accuracy and ensure the continuous delivery of attitude and azimuth functions even when GPS is blocked, all at a fraction of the cost of traditional inertial systems. Potential applications include military land targeting, training systems, fire direction, merchant vessel navigation, aviation flight control, positive train control and precision agriculture.

The benefits of using fiber optic gyroscopes in military applications were described by Mark Hewish in the April 1998 issue of Jane's International Defense Review:

The all-solid-state nature of fiber-optic gyros (FOGs) gives them
several advantages over their mechanical counterparts or ring
laser gyros in military applications. These include low cost,
long shelf life, rapid start-up, small size, low weight, rugged
construction and an inherent immunity to electromagnetic

FOGs also have the potential to provide highly precise, sustainable satellite pointing, and KVH has been awarded a Phase I grant of nearly $100,000 from the Army to develop antennas for high-bandwidth communications on the move. The company is combining its FOG and TracVision(R) II control system to enable sub-0.5 degree pointing for the next generation of X-, K- or Ka-band communications systems for ultra-high data rate transmission.

There are potential applications for a KVH high-accuracy communications system in both the military and commercial sectors. The Global Broadcast System (GBS) used by the military for worldwide, high data rate digital communications requires precision antennas with minimal drift so that vehicles or vessels on the move can maintain satellite contact. As demands increase for mobile high data rate capabilities in business and leisure venues, there are corresponding opportunities for KVH precision antennas in mobile applications.

"SBIR grants are assisting KVH in developing fiber-optic products for a range of military, OEM and commercial applications," said Kits van Heyningen. "We believe this technology will significantly enhance products in both our navigation and communications sectors where demand is escalating for some advanced features that can best be provided through fiber optics."

KVH Industries utilizes its proprietary fiber optic, autocalibration and sensor technologies to produce navigation and mobile satellite communications systems for commercial, military and marine applications. The company has headquarters in Middletown, RI, (USA) with offices in Illinois, Florida and Denmark.

This press release contains certain forward looking statements that involve risks and uncertainties. The actual results realized by the Company could differ materially from the statements made herein. Factors that might cause such differences include, but are not limited to: competing products and technologies; implementation of mobile satellite communications technology; market potential and penetration; reliability of outside vendors, service providers and products; regulatory issues; maintaining appropriate inventory levels; disparities between forecast and realized sales; and design delays and defects. Additional factors are discussed in the company's Annual Report on Form 10K filed with the Securities and Exchange Commission on March 25, 1998. Copies are available from the company's Corporate Communications Department.

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To: Roy F who wrote (198)7/10/1998 11:13:00 PM
From: Roadkill
   of 7012
What are your thoughts on this press release, Roy?

When I first read it this morning, I dismissed it as (1) a rather weak way to support the stock, (2) a way to prepare us for crappy earnings, or (3) both.

Re-reading it this evening -- a little more carefully, I admit -- I saw for the first time the following:

"We believe the result of this positive response may be a ten-fold
increase in TACNAV sales to the U.S. military."

This is a serious statement. The use of "ten-fold", even under the SEC "Safe Harbor" guidelines, indicates dramatic possibilities. The $11 million sold to date has been spread over three years or so. Even spreading the possible $100 million over three years, with existing customer revenues this would create serious top-line growth. Considering that we currently trade at a trailing PSR of about 1, and considering that we would go to a PSR of at least 2 or 3 with any sort of consistent, growing revenue base, this statement implies serious growth in the stock price. It is notable that MKVH didn't say "double" or even "triple", but "ten-fold".

Does anyone out there have any insight into the FOG technology? Does it really add enough to KVH's existing products to stimulate this kind of demand? I'd be interested to hear some thoughts on this.


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To: Roadkill who wrote (199)7/11/1998 12:04:00 PM
From: Roy F
   of 7012
RK: Thanks for making me look at the release more closely.

"We believe the result of this positive response may be a ten-fold
increase in TACNAV sales to the U.S. military."

Strong words indeed. KVH has suggested that the company's market would return to more historic growth rates later this year (second half), I believe. 10X seems a bit much, but if the TACNAV becomes the standard for the Coast Guard, could the Navy be far behind?

Even if they only get half of the 10X, there's money to be made.



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To: Roy F who wrote (195)7/12/1998 8:43:00 PM
From: Roy F
   of 7012
RK and thread: Excerpt from PR of 6/29...

KVH expects to release financial results of its 1998 second quarter on July 17. Write-offs related to the restructuring will be reflected in second-quarter results.

I did, however, receive a snail mail from KVH on Saturday that indicates the earnings release will be 7/21.

Seems like a helluva opportunity to get in at the bottom. I'm awaiting a response from the company regarding the press release and the potential 10X growth in TACNAV. Will post when and if I hear...

Any thoughts on an entry point? Before the release, if the TACNAV estimate is repeated in the announcement... or, should one wait till after the earnings and try to catch a dip?


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To: Roy F who wrote (201)7/12/1998 9:53:00 PM
From: Roadkill
   of 7012
Thanks for the information, Roy.

Back to your previous post -- when you highlighted the word "may" in the 10x sales quote -- I agree with your analysis. The word "may" obviously is the key to that sentence. Nonetheless, I'm still a little taken aback by that press release. Although KVH has had trouble growing recurring revenues, one thing they do have is some management credibility, as well as a pretty impressive customer list. If I heard that "10x sale" quote from some CEO of a penny stock, I would blow it off. But MKVH has not shown himself to be loose with words or to over-promote. Again, the fact that he chose the term "ten-fold" rather than "substantial" or "double" or even "triple" really strikes me as odd. It's also odd that this crucial piece of info was buried in an otherwise uninspiring press release. Could it be that KVH is within a whisker of landing a huge order and wanted to let those (few) of us who follow the company closely get an early opportunity? I doubt it, but I can wish.

Anyway, back to your most recent post regarding a potential entry point. I already have a bundle with an average cost of 3. I won't buy any more until and unless the price moves through 4 with good volume. That will indicate to me renewed interest by the Street and, likely, the beginning of an upswing. Whether that happens next week or next year, I don't know. With such a thin float, it won't take much to make the price move if the conference call is good. With regard to bottom-fishing, your guess is as good as mine, although we do seem to have pretty firm support at 2 1/8 on the bid. That should translate into a 2 1/2 ask price once the greedy MMs are done with you. If I had money to blow (which I don't!), I might put in a buy order at 2 1/2 and see if anybody bites. Of course, we could always go to zero. That's what I call bottom-fishing! :o(

One final point -- we may still have a chance to load up after the conference call if the news is good. I've noticed that, over the last 6 or 12 months, there is a one-to-two day delay in the trading volume/market price following announcements by KVH. Probably because no one follows the company that closely -- currently only 1 analyst follows it, and probably not that carefully. That's why I'm going to wait until after the CC to consider buying more -- unless, of course, I get a move through 4 on volume beforehand.

Do you think there's any significance to KVH moving up the earnings release date?

It's nice to have someone to chat with here. Let us know what IR tells you about the 10x sales comment.


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To: Roadkill who wrote (199)7/14/1998 9:58:00 AM
From: Dexter Enders
   of 7012
I don't have any insight into what KVHI is doing with FOG, but
when I heard about them integrating FOG with their products
the advantage I saw was to reduce interference. The military
is always looking for ways to shield their equipment. I
remember when computers had to have massive amounts of
shielding to protect them from outside interference.

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To: Roadkill who wrote (202)7/14/1998 3:44:00 PM
From: Roy F
   of 7012
Response from KVH...

Roy Fortier,

Thank you for your interest in KVH Industries and your question
regarding our recent press release. You inquired specifically about
our statement that TACNAV sales could increase ten-fold.

Our TACNAV systems have the advantage of offering a cost-effective
tactical navigation system with a record of reliability. This
reliability has been amply demonstrated both in the U.S., where we
continue to get new orders to expand the presence of TACNAVs, and
abroad. It is the Army's own experience and satisfaction with the
units that led to the recent expansion into National Guard

There is a rapidly growing recognition in the military and Congress
that all military fleets that operate off-road, including armored
personnel carriers, Hummers and trucks, need a tactical navigation
system to function effectively. Because TACNAV offers tactical
navigation capabilities at a cost far lower than competing inertial
systems, and since it has a documented record of successful operations
in Army applications, it has gained the attention of various military
departments and congressional representatives who are looking to
upgrade our military but who face Department of Defense budget
constraints. In addition, positive word-of-mouth from those with
TACNAV systems is creating a demand from those who do not have TACNAVs.

As a result, KVH has received strong indications that TACNAV could be
used to upgrade some major fleets in the U.S. military, which has an
estimated potential market overall of some 90,000 vehicles. Discussions
are ongoing regarding future TACNAV orders and we cannot predict at
this time when additional orders may be received. We believe, however,
that a ten-fold increase in our TACNAV sales to the U.S. military from
our current total is possible.

If you have any additional questions about KVH, please feel free to
contact me directly at or call me at 401-847-3327. I
am always interested in feedback from our investors and appreciate
your communicating with us.

Alice Andrews
Director,Corporate Communications

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To: Roy F who wrote (204)7/14/1998 8:22:00 PM
From: Roadkill
   of 7012
Fascinating e-mail. Notice that IR doesn't say "if" they receive more orders, but "when". Are you loading up or are you going to wait to hear the CC after earnings?


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To: Roadkill who wrote (205)7/15/1998 7:57:00 AM
From: Roy F
   of 7012
I started pecking away yesterday... Roy

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